Newb question about leaverage

[lucacrebbe]

Hello may I ask you one thing about leaverage?

Let's suppose I open a position with leaverage on a stock traded at 5$

Leavearge 1: 100

I will put 1'000 $ in a stock at the price of 5 $ , assuming it could go up

As I know with a position 1000 $ in a leaverage of 1: 100 if the stocks drops of a - 1% I will receive a margin call

But will this minus 1% be calculated from the initial price with which I opened the position, or can will it be calculated from the profits I have made too?

Example:


I open a buy position with 1'000 $ on a stock currently traded at the price 5 $

Let's suppose This stocks goes up to 6 $ and from then (6 $ price) it will drop down of - 1%... will then I receive a margin call?

Even if the 1% drop was made from the profits?

Hope you understood what I mean

 

[freezfx]

You are no where near the meaning or usage of leverage. Try and learn more from google to find practical examples. compare with the example you have given.

 

[Enivid]

No, you will not get a margin call in your example trade. Also, you should really read up the basics on margin and leverage to get a clearer idea of the concept.